Steve Hamilton is a Tampa native and a graduate of the University of South Florida and the University of Missouri. He now lives in northern Kentucky. A career CPA, Steve has extensive experience involving all aspects of tax practice, including sophisticated income tax planning and handling of tax controversy matters for closely-held businesses and high-income individuals.

Friday, January 20, 2017

Walk The Walk, Talk The Talk

We have another
not-for-profit story.

Spoiler
Alert: it failed.

Why did it
fail?

Sometimes
there is a great story, the churning of technical arcana and the tease of
suspense.

This is not
one of those times.

Our homespun
protagonist this time is the Community Education Foundation. It had changed
names several times over its life, but that appears to have been its last nom
de jour.

It began
life as a doe-eyed and enthusiastic 501(c)(3) back in 2001. It was going to
change the world:

The …. is a conservative research and
educational institute focusing on public policy issues that have particular
impact on African Americans, Hispanic Americans, Asian Americans, Native
Americans and heritage groups (the ‘Target Groups’).”

COMMENT: “Heritage” groups?

Anyway …

The Foundation’s guiding principle is
to encourage open inquiry about public policy issues that are of particular
interest and educational values for the Target Groups and the public in general
and to provide programs that highlight and educate the Target Groups and the
public about these germane subjects and/or public policy issues.”

Wow. Good
thing someone jumped on “educating” all those “target” groups on “germane”
subjects.

The (c)(3)
obviously had to do stuff to bring enlightenment to the benighted and wretched,
including:

(1)Town hall meetings

(2)National workshops

(3)Congressional forums

(4)Billboards, radio, television, and
other media, such as town criers, bodypainting and soothing rap music drifting
through open car windows while waiting at a traffic light.

Fast
forward. To 2012. Eleven years later. The IRS took a look at said (c)(3). It
wanted to know how it was doing.

The IRS
revoked the (c)(3).

Whoa. That
seemed a bit strong.

What pray
tell provoked such a response?

The
Community Education Foundation had done nothing – zip, zero, the square root of
nada – for 11 years.

The (c)(3)
disagreed and took the matter to Tax Court.

It did have an
argument: it turns out that it tried but failed to do some things in 2009 and
2010, including a “Presidential Inaugural Ball” to honor veterans.

COMMENT: I too have no idea what one
has to do with the other.

The Tax
Court pointed out the obvious: if you want to be a (c)(3), you have to …

·Talk the talk, and

·Walk the walk

In eleven
years, the organization had performed none of the activities it had said it
would when it applied for exempt status.

About Me

Thirty years years in tax practice. It's a long time, and I have seen virtually everything short of the fabled tax-exempt unicorn. I was raised in Tampa, went to school in Missouri, taught at Eastern Kentucky University, lived in Georgia, got pulled to Cincinnati when I married, have in-laws in England and a daughter going to the University of Tennessee. I am not sure where I will wind up next, but I hope there is better weather.